American Eagle Outfitters (FRA:AFG) GF Value Rank : 0 (As of May. 01, 2024)

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What is American Eagle Outfitters GF Value Rank?

American Eagle Outfitters has the GF Value Rank of 0.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

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American Eagle Outfitters (FRA:AFG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » American Eagle Outfitters Inc (FRA:AFG) » Definitions » GF Value Rank

Comparable Companies

Traded in Other Exchanges

AEO:USA AFG:Germany

Address

77 Hot Metal Street, Pittsburgh, PA, USA, 15203-2329

Website

https://www.aeo-inc.com

American Eagle Outfitters Inc is an apparel and accessory retailer with company stores in U.S., Canada, Mexico, and Hong Kong. The Company leases all store premises, regional distribution facilities, some of its office space, and certain information technology and office equipment. American Eagle also has an online business that ships worldwide. It operates in two segments: American Eagle and Aerie. The majority of its revenue comes from its primary brand, American Eagle, which offers an assortment of specialty apparel and accessories for women and men. Geographically, it generates the vast majority of its revenue from the United States.